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Inflation Perceptions

February 21, 2010 9:37 amFebruary 21, 2010 9:37 am

I’ve recently put up several posts on disinflation, and was struck by how many of the comments were along the lines of “Get real — the cost of everything like food and gas has gone way up over the
past two years.” So I thought I’d look at the BLS average price data.

So unless you’re really, really into chicken, prices don’t seem to be soaring at all. (To be fair, though, the overall CPI for food and beverages is up 5 percent over the past two years).

What’s happening, I suspect, is that sharp price rises in some things catch peoples’ attention, while declines don’t. Also, these are tough times, and while the cost of living may not be rising
much, it’s certainly getting harder to afford stuff. Oh, and the big food and gas price increases of 2007-2008, even though they have receded, may have left a mark on memories.

Anyway, it’s interesting to compare perceptions with official statistics.